Hi,
I have a scenario on a property that I would like feedback on.
Let's say a property was bought in the individuals name for $500k with a $400k loan, and has been lived in as owner occupier since bought.
Now several years later the property is worth $1 mil, and the owner is moving out and making it an investment property. Doesn't want to sell as is too good an investment.
The owner then buys another property for $600k to live in requiring a loan value of $480k. When buying this property, takes out a $80k loan on the new property and increases the loan on the old property by $400k to $800k.
Can the owner then negative gear the interest on the full $800k going forward? or can you only ever use the interest on the original loan value on the property as future tax deductions?
Thanks
I have a scenario on a property that I would like feedback on.
Let's say a property was bought in the individuals name for $500k with a $400k loan, and has been lived in as owner occupier since bought.
Now several years later the property is worth $1 mil, and the owner is moving out and making it an investment property. Doesn't want to sell as is too good an investment.
The owner then buys another property for $600k to live in requiring a loan value of $480k. When buying this property, takes out a $80k loan on the new property and increases the loan on the old property by $400k to $800k.
Can the owner then negative gear the interest on the full $800k going forward? or can you only ever use the interest on the original loan value on the property as future tax deductions?
Thanks